The European Commission recently revealed its Fintech Action Plan (“Action Plan”) which outlines the ways in which it intends to go about regulating these technologies. The Action Plan attempts to tackle the regulation of various nascent technologies, including blockchain, cloud computing and the internet of things.

The financial industry is one of the largest users of disruptive technologies and the European Commission has recognised the importance of encouraging the industry to utilise these technologies, albeit not at the detriment of investors and/or consumers. The Action Plan sets out 23 steps to encourage businesses to utilise and experiment with these technologies including the setting up of an EU FinTech Laboratory, publishing a comprehensive strategy on distributed ledger technologies like blockchain and organising workshops with the aim of improving education surrounding cybersecurity.

As part of the Action Plan, the European Commission also released its proposed regulation for crowdfunding service providers. This proposal aims to harmonise Member States’ domestic laws in this area as the European Commission has noted that current national laws are incredibly divergent in this respect.

The Action Plan forms part of the European Commission’s objective of establishing a Capital Markets Union (“CMU”) which it had proposed in 2015. To this end, it is expected that the European Commission will closely monitor technology-driven developments and release several other proposals in the next few months.